On November 2, the Centers for Medicare & Medicaid Services (CMS) released final 2005 Medicare physician fee schedule information and estimated 2005 drug payments. The rule will be published in the Federal Register on November 15. However, you can download it now from CMS's website at http://www.cms.hhs.gov/regulations/pfs/2005/1429fc.asp. Below we will explain important changes to drug payments, drug administration payments and fee schedule payments. CMS estimates that all of the changes together will cause total Medicare revenue to urologists to decline 14 percent between 2004 and 2005. However, if growth in the volume of drugs and physician fee schedule services were to continue at the historical rates, CMS projects that total Medicare revenue to urologists would decline by 8 percent. Changes to your practice will vary depending on your mix of services and payors.

Drug Payments

Beginning January 1, 2005, Medicare drug payments will be 106 percent of average sales price (ASP), and will be updated quarterly based on data submitted by drug manufacturers. The system is set up so that there will be a two-quarter lag time for incorporating data into the drug payment calculations. For example, first quarter payments for 2005 will be based on data from the third quarter of 2004. The most recent set of drug payment estimates released by CMS is based on ASP data submitted by drug companies for the second quarter of 2004.

Actual January 1, 2005 payments will be based on third quarter 2004 data, which was turned in to CMS on October 30. CMS expects to release actual January 1 drug payments by mid-December. CMS has now had two "practice rounds" for calculating drug payments based on drug-company ASP data, which has given them a chance to identify problem areas and adjust the ASP reporting methodology where necessary to increase consistency and clarity of reporting. CMS seems confident that the current list is a very good reflection of what actual drug payments will be next year, and we do not expect the payments to vary much from the current estimates.

The table below shows estimated 2005 payments for drugs that are commonly administered in a urologist's office. CMS estimates that urology as a whole will have a 40 percent drop in Medicare drug revenue in 2005 as a result of switching to the new payment system. To view the complete list, go to http://www.cms.hhs.gov/providers/drugs/default.asp.

HCPCS Code

Description

2004 Pymt.

Estimated 2005 Pymt.

% Change

J1080

Testosterone cypionat 200 MG

$8.44

$15.27

81%

J9031

Bcg live intravesical vac

$143.28

$119.89

-16%

J9202

Goserelin acetate implant

$375.99

$216.10

-43%

J9214

Interferon alfa-2b inj

$13.31

$12.85

-3%

J9217

Leuprolide acetate suspnsion

$500.58

$242.26

-52%

J9219

Leuprolide acetate implant

$4,831.40

$2,197.36

-55%

J9290

Mitomycin 20 MG inj

$185.64

$66.35

-64%

J9291

Mitomycin 40 MG inj

$255.00

$128.60

-50%

J9340

Thiotepa injection

$83.73

$47.90

-43%

Drug administration payments

The Medicare Modernization Act (MMA) of 2003 not only mandated changes to Medicare's drug payment system, but also required CMS to use existing processes to evaluate the drug administration codes and whether or not they accurately take into account the complexity of the administration and resource consumption of the services. As a result, the American Medical Association's CPT® Editorial Panel formed a CPT® Workgroup of specialties, including urology, that were highly impacted by drug payment changes. The CPT® Workgroup reviewed the drug administration codes and the AMA Relative Value Update Committee (RUC) reviewed values for the codes, then the group recommended changes to CMS.

CMS accepted most of the recommended coding changes. However, because the coding changes were finalized after publication of the 2005 CPT® book, CMS created G codes (temporary codes), for physicians to use in 2005 when billing for the services. The changes of note for urology are:

Use G0356 in place of CPT® code 96400. CPT® code 96400, Chemotherapy administration, subcutaneous or intramuscular, with or without local anesthesia, has been deleted. To report a hormonal anti-neoplastic such as Lupron, Zoladex or Eligard in 2005, use the new temporary G code, G0356, Chemotherapy administration, subcutaneous or intramuscular; hormonal anti-neoplastic.

Use G0351 in place of CPT® code 90782. CPT® code 90782, Therapeutic, prophylactic or diagnostic injection (specify material injected); subcutaneous or intramuscular has been deleted. To report therapeutic or diagnostic injections, use the new temporary G code, G0351, Therapeutic or diagnostic injection.

Use G0347 in place of CPT® code 90780. The code previously used for Zometa, CPT® code 90780, Intravenous infusion for therapy/diagnosis, administered by physician or under direct supervision of physician; up to one hour, has been deleted. To report Zometa infusions, use the new temporary G code, G0347, Intravenous infusion, for therapy/diagnosis, initial, up to one hour.

Other commonly-used codes such as 11981 (often selected for Viadur or Vantas) are not affected by this G code transition. 11981 will be reimbursed by Medicare in 2005 at an average rate of $125.06 in the office.

The MMA also required a temporary two-year transitional payment for drug administration injection codes, which was 32 percent in 2004 and will drop to 3 percent in 2005. The table below shows changes in payment for drug administration codes billed by urologists. Reductions to physician work and practice expense RVUs resulting from the CPT® workgroup and RUC reviews of these code also contribute to changes in their payments in 2005.

However, as shown, payment for these codes has increased substantially since 2002 due to changes in the methodology used to calculate their payments. Payment calculation changes for CPT® code 96400 were due to a request from the AUA in 2002, and payment calculation changes for 90782 were due to a change made by CMS in 2004 when the code was assigned physician work RVUs.

Previously, payment for CPT® codes 90782-90788 (Therapeutic, prophylactic or diagnostic injections) was bundled unless it was the only service billed by the physician for the patient that day. However, based on the RUC recommendations and the resulting values for the injection services, CMS is changing this rule so that HCPCS codes G0351-G0354 can be separately paid even if another physician fee schedule service is billed for the same patient that day.

Fee Schedule Changes

Medicare physician fees will receive a 1.5 percent increase in 2005, and the new conversion factor will be $37.8975. The conversion factor is the monetary unit used under the fee schedule to convert the relative value units (RVUs) for each CPT® code into dollars. However, CMS updated many technical aspects of the fee schedule, including practice expense RVUs, liability insurance RVUs and geographic adjustors, meaning that the payments for individual CPT® codes will not increase by exactly 1.5 percent, and payments for some CPT® codes could even decrease.

Most of the technical updates to the fee schedule had a very minimal impact on urology as a whole, but the table below shows some of the payment changes between 2004 and 2005 for some commonly-billed urology CPT® codes. These payments are national averages and are for informational purposes only; payments in your area will be different based on your geographic adjustors.

CPT® Code

Descriptor

2004 In-Office

2004 Facility

2005 In-Office

2005 Facility

% Change In-Office

% Change Facility

52000

Cystoscopy

$206

$109

$207

$110

0%

2%

52601

TURP

N/A

$687

$694

$694

N/A

1%

53850

TUMT

$4,031

$538

$3,948

$532

-2%

-1%

55700

Prostate Biopsy

$225

$90

$222

$88

-1%

-2%

55859

Brachytherapy

N/A

$721

$728

$728

N/A

1%

New and Revised Urology Codes

National average payments for new and revised urology codes are listed below. The actual payment in your area will vary based on your geographic adjustors. Remember, there is no longer a grace period for CPT® codes. Since the codes are effective January 1, they must be implemented in your office on that date.

Backbench standard preparation of living donor renal allograft (open or laparoscopic) prior to transplantation, including dissection and removal of perinephric fat and preparation of ureter(s), renal vein(s), and renal artery(s), ligating branches, as necessary

carrier priced

50327

Backbench reconstruction of cadaver or living donor renal allograft prior to transplantation; venous anastomosis, each

N/A

$213.74

50328

Backbench reconstruction of cadaver or living donor renal allograft prior to transplantation; arterial anastomosis, each

N/A

$187.21

50329

Backbench reconstruction of cadaver or living donor renal allograft prior to transplantation; ureteral anastomosis, each

Cystourethroscopy with transurethral resection or incision of ejaculatory ducts (This code replaces 52347 since it was moved under the Vesical Neck and Prostate in CPT®.)

N/A

$279.30

57267

Insertion of mesh or other prosthesis for repair of pelvic floor defect, each site (anterior, posterior compartment), vaginal approach (List separately in addition to code for primary procedure) CPT® Add-on Code

Renal endoscopy through established nephrostomy or pyelostomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with insertion of radioactive substance with or without biopsy and/or fulguration

50578

Renal endoscopy through nephrotomy or pyelotomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with insertion of radioactive substance, with or without biopsy and/or fulguration

50959

Ureteral endoscopy through established ureterostomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with insertion of radioactive substance, with or without biopsy and/or fulguration (not including provision of material)

50978

Ureteral endoscopy through ureterotomy, with or without irrigation, instillation, or ureteropyelography, exclusive of radiologic service; with insertion of radioactive substance, with or without biopsy and/or fulguration (not including provision of material)

52347

Cystourethroscopy with transurethral resection or incision of ejaculatory ducts (Replaced by 52402)